Pre-market update (updated 8:30am eastern):

• European markets are trading +0.2% higher.
• Asian markets traded 1.1% higher. . 
• US futures are trading slightly higher ahead of the opening bell. 

Economic reports due out (all times are eastern): Durable Goods Orders (8:30am), Pending Home Sales Index (10am), Dallas Fed Manufacturing Survey (10:30am)

Technical Outlook (SPX):

• We are gapping higher yet again this morning, and a positive day in the green, would result in our ninth straight day of positive gains in the market… unheard of.
• We closed on Friday right on the upper channel level of resistance. Today that resistance will lie at 1503. 
• Despite the market rising each of the last three days, the VIX has increased as well over the last three days which would be a bearish divergence. 
• The 10-day moving average continues to trail the current price action in the market. That should be the first layer of support on a market pullback. 
• We are only 74 points away from the SPX hitting an all-time high at 1576, which was achieved on 10/12/07.
• SPX on the weekly is just about as overbought as one can get. 
• Be very careful about adding long positions to your portfolio today. This market is at major extremes on every time frame, and on every noteworthy indicator. 
• The last three times we were this overbought on the weekly chart, the following weeks we saw anywhere between a 2-4 week pullback in the markets. 
• Volume  remains steady. 
• The short-term stochastics hasn’t traded above 80.00 for this long in years. 
• It is extremely difficult to break higher out of a rising channel – hardly ever happens, much less after rising eight straight days higher prior to. 
• T2108 posted in the Market Group shows a market that has only been this ‘overbought’ a few times in the past three years. 
• Continued support sits at the 10-day moving average, as we have managed to trade above it now for 17 straight days. 
• At 1451, you have a significant inflection point for the markets. If the market pulls back and price dips below this price level, there is a significant gap to fill (on the SPY) and will likely see a push below 1430. 
• The channel that we are currently trading in looks very similar to the channel that we traded in last year from June through September. 
• I’m concerned by this market because now we have one very large gap and one smaller gap (formed 1/17) that has yet to be filled on the SPY, not to mention the large unfilled gap from November ’12.
• VIX still remains at the historical lows achieved on Friday by closing at 12.89.
• Of late, there have been quite a few market rallies/sell-offs in the last hour of trading, much like what we saw yesterday and Friday.
• It will take a significant move, but below 1398, the trend will be very bearish. 
• Be aware of upcoming news events and discussions that will permeate the markets: Debt Ceiling Debate, Fiscal Cliff Part II, Employment Recovery. 

My Opinions & Trades:

• Closed out BG at $78.20 from $75.11 for a $4.1% gain. 
• Covered ALV at $66.78 from $65.29 for a -2.3% loss. 
• Added HDB at $40.71 as a short. 
• Remain Short TEVA at $38.10, TGT at $61.03.
  
• Remain Long RDS.B at $70.25.
• May add a new short position if we can get some renewed weakness in the market today. 
• Here is my real-time swing-trading portfolio and past-performance

Chart for SPX: